When your incomes are combined, it can put you into a higher tax bracket than just one of your incomes alone. So, say out of the $222,000 you earn $80,000, and your spouse earns $142,000. The person with the income of $80,000 is in the 12% bracket when saying they are married on their W4. In reality, when they combine their income with their spouses income they are actually in the 24% bracket. So, all of your income is undertaxed by about 10%. The other person making $142,000 is undertaxed on a portion of their income by about 2%. This leaves both of you paying too little in taxes.
Now when you apply the capital gains loss carryover, this will lower your taxable income by no more than $3,000 (maximum amount capital gains can offset your other income) which will lower your tax due. You do need to take it year over year, you cannot choose to not enter it on your form and then use it next year. So, yes, you should enter your capital losses.
However, it will not solve the problem for 2024. For 2024, if you want to avoid having to owe at the end of the year again, it would be a good idea to complete a new W4 form for the one you that makes the most for or even for both of you. You can choose to have an additional amount withheld from your wages as well. There are a few ways to decide how much to have withheld or how to change your form. In TurboTax, there is a W4 estimator, you can find this under Other Tax Situations>>Other Tax Forms>>Form W-4 and estimated Taxes. You can use the TurboTax W4 estimator outside of your tax return. You can also take the amount you owe extra this year and divide it by however many pay periods you have and have that much extra withheld without considering your capital loss carryover if it will not be the same next year. Also, choosing the status on your W4 as married filing separately will increase the amount they withhold. If either of you plan to get a raise, you would want to take that into consideration as well.
You can also do a "dummy return" and see if you owe less when you file separately. Depending on your situation and any credits you are taking, this may or may not reduce your taxes due.
Capital Losses
Why do I Owe Taxes
Ways to Lower Your Tax Bill
Married Filing Jointly versus Married Filing Separately
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